University of Oregon faces $65 million budget gap amid enrollment drop

Fewer out-of-state freshmen at the University of Oregon have pushed the school into a $65 million budget hole that could touch everything from class availability to student support in Eugene. University leaders said the shortfall is tied to significantly lower incoming nonresident enrollment, a problem that matters because about 80% of the Education & General Fund budget comes from tuition revenue and the biggest share comes from out-of-state students and their families.

President Karl Scholz said May 14 that the university needed to cut around $65 million to avoid an ongoing annual deficit. The new gap is more than double last year’s shortfall, when UO eliminated 117 filled positions as part of roughly $29 million in cuts. Those reductions hit officers of administration, classified staff, career faculty and other employees, and the school has already used hiring freezes, pay freezes and limits on non-essential travel to slow spending.

The pressure is not only about one campus. Eugene School District 4J has been dealing with a roughly $40 million deficit, and Springfield Public Schools has faced a $7.9 million shortfall, underscoring how tightly education budgets are squeezed across Lane County. Oregon’s funding system leaves local districts with little room to make up losses quickly, since Measure 5 caps school property taxes at $5 per $1,000 of real market value and state school funding depends on a formula that blends state money with constrained local revenues.

At UO, the enrollment problem has been building. Leaders have pointed to demographic shifts, stronger competition from peer institutions, declining trust in higher education and broader economic uncertainty, along with uncertainty affecting international enrollment. The university had more than 20,700 undergraduates in fall 2025, but Scholz said the latest numbers showed the school was trending far short of its target for nonresident students. That leaves administrators with hard choices about whether to protect faculty lines, trim student services, narrow program offerings or raise more money from families already paying a premium to attend.

The stakes are personal for people on campus and across Eugene’s economy. Economics professor Mike Urbancic said he was laid off in 2025 during the previous round of cuts, a reminder that budget lines become paychecks, and paychecks become local spending. Keaton Miller has said enrollment, inflation and property-tax limits are major drivers of the strain. For Lane County, the result is a university trying to absorb another large cut while still serving a student body of more than 20,700 undergraduates and supporting one of the region’s biggest employers.